With the desire to look beautiful, attractive and graceful catching the imagination of Indians, there is a lucrative business opportunity waiting to be exploited, as Indian women and men no longer shy away from spending substantially on cosmetic and beaut
INDIANS both men and womenare now conscious of the need to look attractive, to exude what is generally termed as ‘personal magnetism’. The TFW team brings to you its maiden article on distributor/dealership and shows how these sectors are providing significant business opportunities.
The hard work required for enhancing one's beauty and attractiveness is no longer a luxury, but has become an inextricable part of one’s daily life. One can skip meals but it is difficult to compromise on daily ritual of applying cosmetics. Also, beauty no longer remains the preserve of the rich and famous. Thanks to a large number of cosmetic products available in the market, one can look beautiful in a jiffy.
To be convinced that Indians are becoming beauty-savvy, one may bear in mind the facts and figures. According to the Confederation of Indian Industries, the total market size of Indian beauty and cosmetics currently stands at $ 950 million, showing its growth between 15 and 20 per cent annually. These figures have encouraged local as well as international players to strengthen their presence in India utilising the advantages of the dealer/ distributorship business model.
Coming of age
Ever since Indian models began to hog the limelight in the arena of international fashion, women in India began to believe in themselves feeling the need to look more beautiful and attractive. They have also realised with their exposure more and more to the international media that the stars in the world of fashion and movies work hard to both enhance and maintain their beauty. Indian women are no longer averse to using beauty care products and have begun to demand the best of cosmetic products the world could offer. Moreover, the great success of Indian contestants at various international pageants has further bolstered Indian women's resolve to look beautiful, graceful and attractive on every occasion. Such an overwhelming desire to look after one's beauty has given rise to the demand for professional beauty care products.
Being the most popular segment of the cosmetics sector, beauty care products have paved the way for subcategories like hair care, fragrances, skincare, colour cosmetics and oral care. Some of the market leaders in this segment are L'Oreal, Revlon, Schwarzkopf, FACES, etc. Other internationally distinguished brands like Premier Dead Sea, Kryolan City, etc., are also eyeing expansion in the Indian market through the distributorship model. Indian cosmetics manufacturers are also in the race for establishing a strong foothold in international markets. Indian herbal cosmetic brands like Himalaya, Shahnaz Husain, and Biotique are a rage in international markets.
Premier Dead Sea (Israel), through its luxurious body and beauty products, has brought to India the essence of vitality, health and beauty found in the Dead Sea - the world's largest natural spa. Upbeat about the burgeoning cosmetics market, Oren Shani, CEO, Premier Dead Sea, says: “India is one of the fastest growing consumer markets in the world, moving from informal markets to a more organised retail sector, including shopping malls. The Indian cosmetics market is increasing twice as fast as the US and the European markets. A rapid growth is also being witnessed in skincare products and in men's grooming markets.”
Another brand of high-end cosmetic products is FACES Cosmetics, which has a proud Canadian heritage spanning 38 years offering an exclusive line of makeup, skincare products and personal care accessories. Headquartered in Toronto, Canada since 1974, FACES has a steadily growing international presence and has aggressively expanded the width of its product offerings in India. It has already been making a splash across most of the major cities in India, with 17 signature stores and 11exclusive mall kiosks in operation.
The 'love affair' of women with cosmetics is difficult to ignore. But now men are also becoming loyalists of this sector. Earlier aisles in supermarkets showcased hair care, skincare and personal care products for women, but today, men's grooming and skincare products have also become a popular choice of the cosmetics sector. The increase in demand for beauty and wellness among both the sexes has the beauty market burgeoning like never before. A Nielsen study shows the percentage of men using hair-care products (37%) is appreciably higher than that of women (28%). Almost 80% of Indian men invest in personal grooming. Pradeep Verma, CEO, Kryolan City, New Delhi, asserts: “Men in today's modern world put a lot of emphasis on their personal appearance and are image conscious, and that is where the usage of cosmetics comes into play. Also, the concept of a well-groomed male, as projected in different media, contributes to an increasing usage of cosmetics by men. Kryolan skincare and particularly the Dermacolor Camouflage Cosmetics are very popular among men.”
Kryolan, headquartered in Berlin, is a specialised manufacturer of professional makeup. Present in 80 countries, across all continents, Kryolan is an acknowledged trademark for professional makeup artists. With the huge success of Kryolan City in New Delhi, more Kryolan flagship stores are being planned in the NCR and other regional locations. The company is also commencing short-term training courses to facilitate their client base and planning a seminar series by international makeup artists and educators for the exposure and benefit of the industry.
A multi-billion dollar industry
According to ASSOCHAM, the size of India's cosmetics market will rise by almost a half to 1.4 billion dollars in the next two-three years. With the help of the distributorship model, the cosmetics market will surely witness unprecedented success. Distributorship and dealership business models give an opportunity to small entrepreneurs to survive along with big companies. Also, most cosmetic brands swear by this sector. With three distributors at present, Premier Dead Sea is looking at having 25 stores within five years, and 40 points of sale inside spa, hotels and salons. Premier Dead Sea's India strategy includes launching flagship Premier outlets in Mumbai, New Delhi, Bengaluru and Hyderabad by the end of 2012.
Verma feels that all business models are typical, with inherent strengths and weaknesses and sometimes they must be used concurrently to suit the large diversity of markets across a vast country like India. About his take on dealer/distributorship, he says: “For any professional product, a dealer/distributor network is an important link in terms of local product availability, supply continuity and reliability, along with after-sale services. However, the distributor network and professional clients must always be well supported with product technical orientation and appropriate marketing inputs.” He also adds that a prior experience in the same field will definitely help the distributor in understanding the products and concepts better and in delivering better services. A sufficient room for an attractive and functional product display, easy reach and accessibility, and above all, a professional working environment with trained sales advisors, are some of the important requisites for partnering with Kryolan City.
Sufyan Kapadia, Owner of New Beauty Centre (NBC) and an exclusive franchisee of top beauty products like NYX, BEN NYE, says: “I prefer both dealership and distributorship models as they are the most feasible formats for a business to nurture. A person with a prior experience in this business will have an upper edge as will be in having an insight into the industry.” A minimum area of 1000 sq ft and an investment of a minimum of Rs 5 lakh are required for NBC store dealership/ distributorship.
Nourishing the cosmetic biz
With a string of cosmetic products available in the market, the distributors also engage in several activities of training and supporting their partners. To emerge as market leaders, they indulge in several marketing gimmicks. For instance, Kryolan City has simple working strategies like regular new product launches, incorporating the most advanced ingredients, combined with controlled product pricing, maintenance of high product quality, reliability and speed of supply and a running technical support programme for the industry. “We provide intensive training to our associates only because we believe that unless they have appropriate technical knowledge of the products, they would not be able to demonstrate the best usage of the products to derive authoritative professional results,” says Verma.
A sector of unparalleled growth
Everyone wants to look beautiful and the cosmetic products sector offers this opportunity at a low cost. Surely, it gives dermatologists and surgeons a run for their money. According to a survey, Indians will spend less on necessities and more on discretionary products. When the entire world had plunged into an economic crisis, the cosmetics sector was the least hit. It has emerged as the most profitable, stable and recession-proof sector to invest in. It would hardly be an exaggeration to state that all that glitters is beauty business.
The hard work required for enhancing one's beauty and attractiveness is no longer a luxury, but has become an inextricable part of one’s daily life. One can skip meals but it is difficult to compromise on daily ritual of applying cosmetics.
According to the Confederation of Indian Industries, the total market size of Indian beauty and cosmetics currently stands at $ 950 million, showing its growth between 15 and 20 per cent annually.
BOX Eye openers
A Nielsen study shows the percentage of men using hair-care products (37%) is appreciably higher than that of women (28%). Almost 80% of Indian men invest in personal grooming.
According to ASSOCHAM, the size of India's cosmetics market will rise by almost a half to 1.4 billion dollars in the next two-three years. With the help of the distributorship model, the cosmetics market will surely witness unprecedented success.
Distributorship and dealership business models give an opportunity to small entrepreneurs to survive along with big companies. Also, most cosmetic brands swear by this sector.